United States v. Maverick Mktg., LLC
| Decision Date | 16 April 2020 |
| Docket Number | Slip Op. 20-49,Consol. Court No. 17-00174 |
| Citation | 439 F.Supp.3d 1329 |
| Parties | UNITED STATES, Plaintiff, v. MAVERICK MARKETING, LLC et al., Defendants and Consolidated Defendants. |
| Court | U.S. Court of International Trade |
Joseph H. Hunt, Assistant Attorney General, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for plaintiff United States. With him on the brief were Jeanne E. Davidson, Director, Claudia Burke, Assistant Director, and Stephen C. Tosini, Senior Trial Counsel.
Barry M. Boren, Law Offices of Barry M. Boren, of Miami, FL, for defendants Maverick Marketing, LLC and Good Times USA, LLC.
Mark A. Loyd, Dentons Bingham Greenebaum LLP, of Louisville, KY, for defendant, Good Times USA, LLC.
Rhonda A. Anderson, Rhonda A. Anderson, P.A., of Coral Gables, FL, for defendant Gateway Import Management, Inc.
Before the court are Defendants Good Times USA, LLC ("Good Times"), Maverick Marketing, LLC ("Maverick"), and Gateway Import Management, Inc.’s ("Gateway") (collectively, "Defendants") motions for partial reconsideration ("motion to reconsider") of the court's order, denying in part and granting in part Defendants’ motions to compel discovery ("order"), as well as for leave to file supplemental evidence for the motion to reconsider ("motion to supplement"). See United States v. Maverick Marketing, LLC, 44 CIT ––––, 427 F.Supp.3d 1386 (2020) (" Maverick I"); see also Am. Mot. Partial Reconsideration of [Order] at 1–2, Apr. 14, 2020, ECF No. 102 ("Defs.’ Br. Supporting Reconsideration"); Am. Mot. File Supp. Defs.’ Mot. Reconsider, Apr. 14, 2020, ECF No. 103 ("Defs.’ Mot. Supp.").1 Specifically, Defendants request, pursuant to U.S. Court of International Trade Rule ("USCIT") Rule 54(b), that the court reconsider its decision to deny: Maverick's requests for production ("RFP") Nos. 9, 25, 38, and 39 for industry documents pertaining to cigar pricing; Maverick's RFP Nos. 30–33 for production related to trademarks of nonparty companies; and, Good Times’ RFP Nos. 4–8, 15, and 17–21 for government documents on affiliated nonparties.2 See Defs.’ Br. Supporting Reconsideration at 3–5; see also Maverick Status Report at RFP Nos. 9, 25, 30–33, 38, 39; Good Times Status Report at RFP Nos. 4, 8, 15, 17–21.3 Defendants further ask the court to amend its order and compel Plaintiff to produce the documents requested. Id. at 14–15. In addition, Defendants request leave to file supplemental evidence in support of that motion. See Defs.’ Mot. Supp. at 1–2. Plaintiff opposes both motions. See Pl.’s Opp'n [Defs.’ Br.] at 1, March 9, 2020, ECF No. 95 ("Pl.’s Br. Opp'n Reconsideration"); see also Pl.’s Opp'n Defs.’ Mot. for Leave Supp. Mot. Reconsideration, Mar. 31, 2020, ECF No. 99 ("Pl.’s Opp'n Mot. Supp."). For the reasons that follow, the court grants Defendants’ motion to supplement and denies Defendants’ motion for partial reconsideration.
The court presumes familiarity with the facts of this case as set forth in its previous opinion, see Maverick I 44 CIT at ––––, 427 F.Supp.3d at 1390–93, and recounts those relevant to disposition of these motions. Plaintiff commenced separate actions, later consolidated, pursuant to section 592 of the Tariff Act of 1930, as amended 19 U.S.C. § 1592(d) (2012),4 seeking to recover unpaid Federal Excise Taxes ("FET") from Defendants. See Am. Summons, Aug. 3, 2017, ECF No. 8; Compl., July 10, 2017, ECF No. 2; Order, Sept. 12, 2019, ECF No. 66 (consolidating Ct. Nos. 17-00174, 17-00232, 19-00004, and 19-00019 under Ct. No. 17-00174). Plaintiff alleges that Defendants failed to disclose a "special arrangement." See Compl. at ¶ 21. Additionally, according to Plaintiff, Defendants made material misstatements to Customs and Border Protection ("CBP") regarding FET owed, by using "transaction value" on entry forms, when the statute demands application of constructive sales price ("CSP") to merchandise entered pursuant to a special arrangement. Id. at ¶¶ 21–25. Plaintiff alleges these false statements were the result of Defendants’ failure to exercise reasonable care. See id.
Defendants deny these allegations, see Defs.’ [Maverick] & [Good Times’] Answers and Affirmative Defenses at ¶¶ 21–25, Mar. 29, 2018, ECF No. 48 ("Answer"), and raise among their affirmative defenses that they acted with reasonable care and were not negligent, "because they received and reasonably relied on professional advice from their customs house broker and an experienced trade attorney" and fully complied with applicable statutes and regulations. See id. at Third Affirm. Defense. Defendants further contend they were not negligent because "Plaintiff had an established and uniform practice" ("EUP") of allowing the same behavior complained of in this case. See id. at Fifth Affirm. Defense.
On April 4, 2019, Defendants Maverick and Good Times served RFPs on Plaintiff. See [Maverick and Good Times’] Mot. Order Compelling Disc. & Consideration Sanctions at Exs. A–B, Sept. 26, 2019, ECF No. 67 ("Maverick's Mot."). On June 7, 2019, Plaintiff responded. Id. at Exs. E–F. On June 27, 2019, Defendants notified Plaintiff of their objections to Plaintiff's production responses. Id. at Exs. I–J. Plaintiff replied to Defendants’ objections on July 10, 2019 and supplemented its responses. Id. at Ex. M. Defendants thereafter filed their motion to compel. See generally Maverick's Mot.
On February 7, 2020, the court rendered its decision on Defendants’ motion to compel. See generally Maverick I. In relevant part, the court denied the motion to compel with respect to certain industry documents pertaining to cigar pricing, certain trademark information of nonparty companies, and certain government documents on affiliated nonparties (collectively, "discovery requests"). Id. at 6–22. Discovery remains ongoing.
The court continues to have jurisdiction pursuant to 28 U.S.C. § 1582. See United States v. Maverick Mktg., LLC, 42 CIT ––––, ––––, 322 F. Supp. 3d 1373, 1379–80 (2018) (); see also United States v. Gateway Imp. Mgmt., 42 CIT ––––, 324 F. Supp. 3d 1328 (2018).
A court may reconsider a non-final judgment, pursuant to USCIT Rule 54 " ‘as justice requires,’ meaning when the court determines that ‘reconsideration is necessary under the relevant circumstances.’ " Irwin Indus. Tool Co. v. United States, 41 CIT ––––, ––––, 269 F. Supp. 3d 1294, 1300–01 (2017) (quoting Cobell v. Norton, 355 F. Supp. 2d 531, 539 (D.D.C. 2005) ), aff'd, 920 F.3d 1356 (Fed. Cir. 2019). Factors a court may weigh when contemplating reconsideration include whether there has been a controlling or significant change in the law or whether the court previously "patently" misunderstood the parties, decided issues beyond those presented, or failed to consider controlling decisions or data. See, e.g., In re Papst Licensing GmbH & Co. KG Litigation, 791 F. Supp. 2d 175, 181 (D.D.C. 2011) ; Singh v. George Washington Univ., 383 F. Supp. 2d 99, 101 (D.D.C. 2005). The movant carries the burden of proving that "some harm, legal or at least tangible," would accompany a denial of the motion. Cobell, 355 F. Supp. 2d at 540.
Given that the USCIT Rules do not prescribe a procedure to amend or supplement a motion or brief, USCIT Rule 1 governs, granting the court discretion to "prescribe the procedure to be followed in any manner not inconsistent with these rules." See USCIT R. 1. Further, USCIT Rule 1 provides that the rules "should be construed, administered, and employed by the court and the parties to secure the just, speedy, and inexpensive determination in every action and proceeding." Id.
Defendants request that the court reconsider and amend its order to compel Plaintiff's response to Defendants’ discovery requests. See Defs.’ Br. Supporting Reconsideration at 1–2, 6–14. Defendants explain this production is relevant for determining whether Defendants’ entries were valued at fair market price ("FMP") and whether or not they exercised reasonable care, i.e., were not negligent, in reporting value of their cigars on entry. See id. at 3–6, 9–13. Further, Defendants point to Plaintiff's own discovery requests that, in their view, further underscore the relevance of Defendants’ requested production and for which they seek leave to file as supplemental evidence. See Defs.’ Mot. Supp. at 1-2. Without the requested cigar pricing documents, trademark information, and government documents, Defendants contend that they would suffer harm in presenting their case. Defs.’ Br. Supporting Reconsideration at 1–2, 9. Plaintiff counters that the motion to reconsider is unwarranted because the court did not err in denying the motion to compel and, therefore, requests the court to deny that motion in full. See Pl.’s Br. Opp'n Reconsideration at 1, 3–10. In addition, Plaintiff urges the court to reject Defendants’ request for leave to supplement their motion to reconsider, as it is untimely and irrelevant. See Pl.’s Opp'n Mot. Supp. at 1, 4–5. The court grants Defendants leave to supplement their motion to reconsider, given that no harm follows from granting their motion, and accepts their supplemental evidence, Pl.’s Second Set of Interrogatories, Requests for Admission and [RFPs] to [Good Times], Mar. 17, 2020, ECF No. 96-1, for filing. However, and in view of that supplemental evidence, because the discovery sought is irrelevant, duplicative, and unduly burdensome, and Defendants do not persuade that they would be harmed without the requested production, the court denies the motion to reconsider.
Defendants request leave to supplement the motion to reconsider with Plaintiff's discovery requests, because that supplemental evidence "sheds light on the relevance" of Defendants’ own discovery requests at issue in the motion to reconsider. See Defs.’ Mot. Supp. at 1–2. In particular, De...
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